CIG just keeps on go­ing

Finweek English Edition - - MARKETPLACE HOUSE VIEW -

I first rec­om­mended a buy on this stock back in 2011 and then ev­ery year since. The beauty is that the com­pany has just kept on go­ing, ex­pand­ing by mak­ing ac­qui­si­tions and grow­ing or­gan­i­cally with the main fo­cus re­main­ing elec­tri­fi­ca­tion. Not pro­duc­ing but rather en­abling the pro­duc­ers to move the elec­tric­ity around via over­head ca­bles. CIG is also very big in the re­new­able en­ergy space and re­cently bought a rail busi­ness in­stalling the over­head ca­bles for trains.

Its lat­est trad­ing up­date sees head­line earn­ings per share (HEPS ) to be around 135c for the six months to end Fe­bru­ary, mak­ing for a likely 270c for the full year and putting it on a for­ward price-to-earn­ings ra­tio (P/E) of just over 10 times.

What we haven’t seen from the group is a div­i­dend and we’re un­likely to get one at the in­terim stage, but as it gets larger and more prof­itable, it is likely to start pay­ing a div­i­dend and CIG has blocked div­i­dends in An­gola (from AES) that it can bring out in Oc­to­ber 2016. This could see a maiden div­i­dend at the year-end fur­ther help­ing the share price.

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